Leading CEOs in South Africa have started mitigating risks by focusing on technology; talent; and environment, social, and governance (ESG) to shape progress over the next three years amid fears that the anticipated recession would disrupt growth.
This is according to the KPMG 2022 CEO Outlook South African edition, which was released yesterday and looking at potential growth in uncertain times.
The annual report draws on the perspectives of 1 325 CEOs across 11 markets to provide insight into their three-year outlook on the business and economic landscapes.
The report found that 72% of local executives have already taken steps to boost productivity in preparation for the anticipated recession, indicating CEOs were cautiously focused on future opportunities during such uncertainty.
It said that the biggest challenge facing local CEOs in delivering their ESG strategy over the next three years was identifying and measuring agreed metrics.
KPMG South Africa CEO Ignatius Sehoole said the importance of ESG initiatives on businesses, especially with regard to improving financial performance, driving growth, and meeting stakeholder expectations cannot be stressed enough.
“While we know there is a lack of an accepted global framework for measuring and disclosing ESG performance, the KPMG survey revealed that 65% of stakeholders (institutional investors and employees) are demanding greater ESG transparency and reporting, and 60% of CEOs noted that 10% of their revenue would be allocated to invest in programmes to enable organisations to be more sustainable,” Seehole said.
“However, what is encouraging to see is that confidence in the resiliency of the global economy over the next six months is optimistic, with 64% of local CEOs – compared to 73% of global executives – indicating that they are still cautiously focused on future opportunities during the current uncertainty,” he said.
Seehole also said that progress on diversity and inclusion had moved up in relevance in the business sector, with 68% of global respondents indicating that this was important to them.
Meanwhile, disruptive technology has emerged as the top risk and greatest threat to organisational growth over the next three years, with four times as many CEOs citing this as a priority.
Supply chain risk has now been highlighted as the top risk, which is a change from 2021, where cybersecurity was identified as the top risk, and 82% of local CEOs have noted that they were prepared for cyberattacks, compared to 56% globally.
The survey also revealed that current uncertainty was driving CEOs to continue to prioritise corporate digital transformation with 84% stating that they have an aggressive digital investment strategy designed to help them secure a first-mover or fast-follower status, compared to 72% globally.
Business Leadership South Africa (BLSA) CEO Busisiwe Mavuso said most of South Africa’s counterparts were well ahead of the country when it comes to digitisation and the Fourth Industrial Revolution (4IR).
“However, it is encouraging to note that 84% of local CEOs are investing in aggressive digital investment strategies,” Mavuso said.
“Innovation and new technologies do not only have the potential to create employment but also increase economic growth, especially during these uncertain times,” she said.
BUSINESS REPORT